How much longer can the yen weaken? Hoshino Akira, head of Japan operations at Citigroup, recently made a bold prediction—if the yen continues to depreciate, the Bank of Japan is very likely to raise interest rates three times this year.

Specifically, once the USD/JPY exchange rate breaks through the 160 level, the central bank may act in April, raising the unsecured overnight borrowing rate from the current level by 25 basis points to 1%. Hoshino believes that if the yen fails to rebound, a second rate hike will come in July, followed by a third before the end of the year. In other words, the rate hike cycle could span the entire year.

Hoshino's forecast indicates that this year, the USD/JPY fluctuation range will be approximately between 150 and 165, with a slightly below 160 level possibly serving as a key support. These data points could signal a new market rhythm for traders paying attention to exchange rate movements.